The government said the site’s owner, The Australian Sawmilling Company (TASCO), had also failed in their duty to prevent fire risk.
The Environment Protection Authority will pursue the previous site occupiers, owners and company directors to cover its costs.
The clean-up operation is expected to take years to clear the demolition waste, which includes timber, concrete, bricks, plaster, glass and ceramics.
The state government confirmed the funding available to liquidators to maintain the site had run out, triggering the EPA’s decision to step in.
Last year the City of Greater Geelong failed in its legal bid to shut down the recycling business in the Victorian Civil and Administrative Tribunal, despite emergency services giving evidence that the site was likely to catch fire.
At the time of the hearing, the stockpile was reportedly far higher than the legal nine-metre height limit.
The tribunal was also told the site was equipped with a 400-litre water tank but it was empty when council inspectors visited the site.
Former C&D director David McAuliff, said he had not been notified that the state government had seized the site.
“This is the first I’ve heard of it,” he said, when contacted by The Age. Mr McAuliffe said he would “seek some advice” on the latest developments and potentially comment at a later date.
Earlier this month the City of Greater Geelong said it was pursuing legal action against Mr McAuliffe.
In September The Age reported that C&D Recycling walked away from the site, avoiding a potential $100 million clean-up bill.
Environment Minister Lily D’Ambrosio said the government had now stepped in to reduce the safety risk to the environment and community.
“The former operator’s complete disregard for health and safety is disgraceful and has put the community at risk,” she said.
“We will be pursuing the private operators involved for every cent of the clean up cost. They created this mess, it’s only right they pay for it to be fixed.”
City of Greater Geelong mayor Bruce Harwood said both TASCO and C&D had gone into liquidation.
He said the Lara site should be returned to some form of industrial use. It opened in 2013.
Multiple fires have broken out in recycling plants and industrial warehouses storing chemicals in Melbourne over recent years.
In 2017 a massive erupted at an SKM Recycling facility in Coolaroo, blanketing Melbourne’s northern suburbs in acrid smoke and forcing residents to leave their homes.
That fire burnt for almost three weeks.
Earlier this month another massive blaze broke out in a Campbellfield warehouse where chemical stockpiles had been stored.
Benjamin is a state political reporter